The Power of Data

As an immigrant female entrepreneur, I stumbled into the world of data and technology much like one accidentally discovers a secret passage in an old library—utterly unplanned but thrilling. After 16 splendid years in corporate finance, project management, IT, strategy, and sales, a wild craving for meaningful work hit me. It was urgent and all-consuming. In the 1993 documentary “The War Room” James Carville says ”Outside of a person’s love, the most sacred thing that they can give is their labour. And somehow or another along the way, we tend to forget that. Labour is a very precious thing that you have. Anytime that you can combine labour with love, you’ve made a good merger”. I needed to make that merger.

In Canada, of the 84,000 registered charity organizations that filed the T3010 in 2021, 64,000 (representing 76%) are classified as small, and 10,000 (12%) are classified as mid-size. These organizations form the backbone of community support, orchestrating the majority of programs and services. At the same time, there are insufficient support systems and resources to help these organizations effectively carry out their mission. I’m eager to bolster their efforts, helping them navigate and thrive by integrating technology into their noble mission.

Technology revolutionized our lives, bringing countless benefits and opportunities. Technology is exciting and it enables us to reach new heights. Remember when getting lost was a thing? Now, with smartphones, we can navigate through life without asking anyone for directions.

At the same time, technology contributes to the creation of a digital divide – a gap between those who have access and can use it effectively and those who do not. The divide extends beyond mere access to devices and the internet; the divide includes disparities in digital literacy, skills, and opportunities. Multinational corporations and businesses are often on the front end of latest technological advancements, large nonprofits also have the necessary resources to leverage technology to advance their mission. But for small and mid-size nonprofits the struggle with technology and data is real. Often it is not even clear where to start. The consequences of the digital divide are far-reaching as it perpetuates existing inequalities between the privileged and the rest. The responsibility to narrow the divide and level the playing field lies with everyone – nonprofits themselves, large organizations, governments, and us, the technology professionals.

While I wouldn’t label myself as a data scientist or even a data expert, I do proudly wear the hat of a nonprofit technology expert, having spearheaded over 200 system implementations for nonprofits. Our clientele ranges from a compact team with a single employee, the Executive Director, to a bustling organization of over 150 staff members. Since 2016, my firm, Una Buro, has been the tech partner for over 60 nonprofits, supporting them in implementing systems that not only capture, process, and analyze data, but also morph these organizations into data-driven powerhouses. At the core of our practice lies the fundamental role of data. Our daily grind involves meticulously overseeing, cleansing, and transferring tens of thousands of data records. Our team is committed to empowering nonprofits by setting up robust data capture systems, sculpting meaningful metrics, and bringing data to life through vivid visualization.

 

What gets measured, gets managed

In the nonprofit sector, measurement and data capture are familiar territories, not uncharted waters. From annual reports and AGMs to funding applications and board meetings, data is the silent narrator of our stories. But the landscape is shifting. Today’s nonprofit is in a high-stakes game where the ability to harness data isn’t just nice-to-have; it’s a must-have. The advent of sophisticated data capture technologies, coupled with a growing demand for transparency and accountability, isn’t just nudging nonprofits towards a more strategic embrace of data—it’s setting the stage for a paradigm shift. Now, the call isn’t just to collect data; it’s to weave it into the very fabric of decision-making, to turn numbers into narratives, and insights into action. This is more than keeping pace; it’s about setting the pace in a world where data isn’t just power—it’s impact.

Before we jump into the nitty-gritty, allow me to highlight the technical differences between data, intelligence, and measures.

Data

Raw, unprocessed facts, figures, or information that are collected or generated. It can be in various forms, such as numbers, text, images, or audio. In its pure form, data on its own lacks context and meaning. It represents discrete pieces of information without any analysis or interpretation applied to it. For example, a set of numbers representing the number of food bank visits, or the number of intakes is data.

Measures

Specific data points; provide a standardized way to quantify and track variables or phenomena, enabling comparison, analysis, and decision-making. For example, all registered charities are required to report the total number of volunteer hours per year.

Intelligence

Insights, knowledge, and understanding gained from analyzing and interpreting data. It is a process of extracting meaningful patterns, trends, relationships, and conclusions from the data. Intelligence provides a deeper understanding of the data and its implications. It adds context, relevance, and actionable insights to the raw information. It involves critical thinking, analysis, and the ability to draw conclusions or make predictions based on the data. For example, the fact that the number of recurring volunteers is decreasing year over year can be because younger volunteers have conflicting availabilities, or are not interested in making long-term commitments.

These concepts are interdependent and distinct in value and purpose, yet for simplicity I will be using these terms interchangeably and I hope the geeks will forgive me.

 

Data In the Nonprofit Sector

In my world, “data” is like the pineapple on pizza debate—people either dive in or can’t even stand the sight of it. You’ve got the “Data Devotees” chanting “More metrics, please!” as if data points were slices of pepperoni. And then, there are the “Numerically Nervous” folks who break out in hives at the mere mention of spreadsheets. Yet, despite these differing views, we can all agree that data holds undeniable value for organizations, particularly nonprofits.

Unlike before, when nonprofits might have leaned on heartfelt stories or anecdotal evidence, the shift towards data-driven decision-making marks a significant upgrade. It’s like moving from guessing to knowing. While stories tug at the heartstrings, numbers and facts offer a solid foundation for making informed choices, demonstrating impact, and engaging supporters. So, even if the mention of data might not spark joy for everyone, its role in guiding nonprofits toward greater effectiveness and clarity is something worth getting behind, minus the drama of a pineapple pizza debate.

A focus on data is often caused by an external event such as a board meeting, a funding report, a grant application, an annual report, or an AGM. An important meeting is coming up, and we need our stats in two weeks. We take a deep breath to take control of panic and dread, as everyone—coordinators and Executive Director alike—goes on the hunt for data. “Who is keeping track of our participants? It is Nancy! She has a spreadsheet.” So now the team has hope. “But she left, and no one took over.” “That’s fine, at least we have some data.” “Nope, we don’t have the data because no one can find her spreadsheet.” Now panic sets in. “Well, let’s see if we can find participant data somewhere else.” Now dread sets in, actually no other data can be found. In the end, the team always manages to pull data and deliver that report—that’s just what we do. And once we hit the “send” button and exhale a sigh of relief, we can return to our data-free paradise and try not think about it… until next time.

If this sounds even vaguely familiar, you are not alone. In a recent survey of 1250 nonprofits across 10 countries, 30% of nonprofits report struggling with data management.

It is no surprise that so many people have a negative association with data and avoid the subject at all costs. No one likes pain, so avoiding it makes complete sense.

But what if your data experience for that tricky funding application is as smooth as spreading room-temperature butter on freshly baked bread? Or as easy as riding a bicycle after 10 years? Fine, maybe not as smooth and easy since there is no pure magic when it comes to data, but with discipline, consistency, focus, and, yes, some magic, any organization can become a data-driven organization.

 

Importance of data in the nonprofit sector

Data in for-profit organizations is characterized by its clarity and well-established nature. Metrics such as profit, share price, revenue, market share, and capitalization provide clear indicators of a company’s performance. The profit margin, for instance, allows the public to assess and compare companies without necessarily understanding their specific industry or operations. In the for-profit sector, the importance, value, and relevance of such data are widely recognized and regulated, leaving little room for ambiguity.

For non-profits, on the other hand, measurement has been getting a bad reputation. Since there are no profit margins, and no stock price, establishing a success measure is not a simple task.

Some feel that if we measure and collect data, it takes away from the goodness and nobility of our work, it will tarnish our passion and dedication. Why should we spend our effort on data when there are real people, real issues that need our immediate attention? In my tenure, I have heard several times comments along the lines of “Numbers will never accurately express the work we do,” and “We only collect data because funders, the board, and the government demand it, so we do it for them.” When I hear this line of thinking, I take a deep breath to slow my heart rate and make my pitch that in today’s data-driven world, the effective use of data has become increasingly crucial for nonprofits to achieve goals and maximize impact. My top three reasons for a nonprofit to adopt a data-driven approach are:

  1. Compelling storytelling
  2. Effective decision-making
  3. Enhancement of program and services

 

Data-driven storytelling

A compelling story has data. Data-driven storytelling has the power to create emotional narratives that engage and mobilize stakeholders. The use of data in communication creates a sense of  urgency for the particular issue, showcases the effectiveness of a program, and advocates for change. Data-driven storytelling helps to capture the attention of, and amplify the message to, potential partners or funders.

Read the following two calls to give:

Donate to provide thermal blankets for protection and warmth during a humanitarian emergency.

In Ethiopia, women and girls die each year because of complications during labour or childbirth. Your gift can save the life of a mother and her baby by improving essential maternal health care services.

By adding a data point to these statements, we make a stronger case:

– $175 can provide 10 thermal blankets to provide people protection and warmth during a humanitarian emergency.

In Ethiopia, 13,000 women and girls die each year because of complications during labour or childbirth. Your gift can save the life of a mother and her baby by improving essential maternal health care services

Communicating impact and generating engagement is tough. Storytelling techniques help to cut through the clutter. As well,  without data a story can be perceived as fiction. Data helps our brain to anchor the message and to quickly relate to the story, because, regardless of our math skills, we all understand the difference between 1 and 100. A data-driven story supported by other visual media makes your story believable, accessible, and relatable.

 

Data-driven decision-making

As human beings, we often think positively of what our “gut” tells us to do. We even romanticize and take pride when decisions are driven by intuition. Although intuition plays an important role in decision-making, organizations that rely primarily on data are three times more likely to experience improvement in decision-making than those who use less data.

Data-driven decision-making (DDDM) is a process by which data is used as the primary source of information; it is reliant on empirical evidence rather than on intuition, assumption, or personal benefit. Using data to make decisions helps us to reduce our bias, identify issues that we otherwise do not see, and, most importantly, think creatively and be proactive. Despite the well-established fact that DDDM makes organizations stronger, only 34% of nonprofits consistently rely on data to make decisions.

 

Enhancement of Program and Services

Any path to improvement begins with understanding the current situation. Assessing the effectiveness of a program is essential, but challenging without relevant data. Data collection of program-related measures helps us understand if a program is meeting its goals; and is critical in identifying improvement opportunities and foreseeing problem areas. If, then, you believe in the value of a data-driven organization, then where do you start?

 

Building a Data-Driven Organization

In the era of digital transformation, the journey towards becoming a data-driven organization is not just beneficial but essential for nonprofits aiming to maximize their impact. This journey is multifaceted, requiring a blend of leadership vision, staff empowerment, and the right technological infrastructure to navigate the complexities of today’s data landscape effectively.

Leadership

The process of building a data-driven organization begins with strong leadership. The Executive Director and Board of Directors play a pivotal role in setting the tone for data adoption. Without a clear and unwavering vision that emphasizes the integral role of data in the daily operations of an organization, success is impossible.

I recall a particular meeting with an Executive Director discussing the implementation of a system to collect data and generate metrics. The ED expressed a sentiment of indifference, stating, “I will allocate the necessary funds and assign skilled staff, but please spare me from involvement as I have other priorities.” Unfortunately, such an approach hinders the potential and is doomed to failure.

In contrast, there are leaders who wholeheartedly embrace the mantra, “If data is not captured in the system, it simply does not exist.” This mindset reflects a commitment to comprehensive data collection that spreads to the rest of the team and lays the ground for success.

The most remarkable commitment I have witnessed was an ED’s decision to temporarily reduce service delivery in order to provide comprehensive data training for employees. This action exemplified a deep dedication to harnessing the power of data, and to recognizing the importance of equipping staff with the necessary skills and knowledge.

Leadership’s commitment and belief in the transformative potential of data is crucial for fostering a data-driven organization. A steadfast dedication to integrating data into the fabric of decision-making processes and to resource allocation sets the stage for achieving meaningful outcomes.

Data literacy

To foster a data-driven culture, we need to equip staff with the necessary data literacy and analytical skills. Providing training and professional development opportunities enhances employees’ ability to collect, analyze, interpret, and communicate data effectively.

Organizations that prioritize data often have dedicated staff members or even departments responsible for data processes and analysis. In the case of larger organizations, some collaborate with data scientists and utilize resources like Statistics Canada to gain deeper insights into their impact. However, most nonprofits simply cannot afford to have a dedicated resource person just for data and analytics. As a result, team members are expected to develop data literacy and focus on data within their respective areas. Each team member becomes accountable for data collection and analysis related to their specific organizational processes. For example, the volunteer coordinator becomes well-versed in volunteer engagement data, while the development staff takes ownership of donor data. The success of this setup relies on providing adequate training and support to staff members.

While technical skills and a passion for data are valuable, they are not the sole determining factors for success. What matters most is the willingness of staff members to learn, their curiosity, and the level of support they receive. In our experience, we have witnessed staff members from various backgrounds successfully embark on the data path. On one project we trained an 80-year-old volunteer to carry out complex data collection tasks. Hence, the belief that only young, tech-savvy individuals can contribute to a data-driven organization is a myth. What truly matters is having staff members who fully understand and embrace the importance of data.

The most challenging aspect of any organizational transformation is not the technology or infrastructure but rather the people who drive it. Building a data-driven organization requires proper training, ongoing support, and a clear vision that is continuously reinforced.

Harnessing a data mindset collectively from the team can be a significant obstacle to overcome. To address this challenge, we recommend implementing an internal data advocacy campaign. Accompanied by strong data-driven leadership, such a campaign can help ignite a shared understanding of the value of data, and motivate staff members to actively participate in the data-driven culture.

While resource limitations may prevent organizations from having dedicated data personnel, fostering a data-driven culture is still possible. By empowering staff members through training, support, and a shared vision, organizations can break down barriers and build a culture where data is embraced.

Data accessibility and infrastructure 

Now that we have leaders and a team on board and understand that they are the ultimate drivers of a data-driven organization, we need to establish a robust data infrastructure. This involves creating systems for data collection, storage, management, and analysis that are accessible, secure, and user-friendly.

One of the common challenges associated with establishing data infrastructure is its dispersion across multiple sources. In today’s digital landscape, organizations receive data from numerous channels, including phone calls, website contact forms, CanadaHelps donation pages, Facebook donations, SurveyMonkey petitions, Zeffy peer-to-peer campaigns, and many more. In fact, on average, a nonprofit organization has 10 different data sources just for donor information. Each of these sources holds unique value, as generating and sustaining engagement requires organizations to interact with constituents through various channels. Therefore, expecting a nonprofit to rely on a single incoming data source is unrealistic.

At the same time, absence of a centralized data repository makes it difficult to analyze and derive insights. Acknowledging the reality of data dispersion, organizations must recognize the importance of bringing data from diverse sources to a central location. This facilitates data consolidation and analysis, enabling a holistic view of the organization’s operations and constituents.

In recent years, the concept of integration and data transfer has gained significant importance as organizations realize that while consolidating data sources is important, maintaining flexibility and scalability, and reaching constituents where they are, take precedence. Since data is generated from multiple sources, aggregating it in a single place is the strategy data-driven organizations adopt to extract meaningful insights and intelligence.

Clear Metrics and Key Performance Indicators (KPIs)

When discussing data and metrics in the nonprofit sector, it is important to consider the different categories of measures: inputs, outputs, outcomes and impact.

Inputs

Refers to resources used to enable the organization; foundational elements that enable nonprofits to operate and deliver their services. Inputs are scarce. 

Outputs

Represent what the nonprofit delivers or produces

Outcomes

Reflect the immediate effects and benefits for the participants or recipients.

Impact

Refers to the broader and long-term effects resulting from a nonprofit’s activities; encompasses the changes, benefits, or improvements experienced by individuals and/or communities, as result of a nonprofit’s work. 

  • Number of volunteers
  • Number of volunteer hours
  • Number of donors
  • Funds raised
  • Number of grants given
  • Number of individuals served
  • Quantity of services provided
  • Number of events organized
  • Number of consultations provided
  • Higher engagement or participation rates
  • Enhanced employability or economic conditions
  • Improved skills or capacities
  • Decreased mortality rate
  • Improved long-term financial situation
  • Higher employment

We often observe organizations focusing heavily on collecting input data and presenting these metrics as measures of success, while not giving output measures equal attention. Additionally, due to the complexity involved, impact measurement tends to be overlooked altogether.

It is also a common practice to rely on nominal values when examining data. Organizations monitor closely the total dollars generated by fundraising efforts in a specific period, or total number of participants served. These measures are important; however, the focus should also be on understanding changes over time, such as identifying decreases or increases. Monitoring changes provides foresight and the ability to adapt, and adjust before it is too late.

 

Lessons Learned

Once we have a mechanism to collect and analyze data, it is easy to get pulled into the dark side of data. You see an interesting trend and so you get pulled into drilling down, wanting more, asking the team to dig deeper, and adding more and more fields to the registration/donation page. In the end, however, this digging adds marginal value or none at all. When we work with clients to establish data processes, we build numerous reports and dashboards for data analysis, yet less than 5% of reports and dashboards are used for decision-making.

So, fight against the urge to collect and analyze data just for the sake of collecting and analyzing, and consider a “less is more” philosophy. The concept of “less is more” encourages one to simplify, prioritize, and focus on core objectives. By doing so, organizations can achieve greater clarity, efficiency, communication, decision-making, and long-term sustainability. Embracing simplicity and a focus on essential metrics enables us to maximize their impact and create meaningful change.

The most valuable aspect of data is actionability. Ask yourself what you will do with a certain data point. For example, if you are collecting the gender of your donors to understand the demographics, are you personalizing your outreach efforts based on gender? Most organizations do not, as we realize that this approach will inevitably lead to communication gender bias.

We can apply Pareto’s principle of 80/20 to data: 80% of the value is contained within 20% of data. This means that 80% of the data we collect and analyze has only 20% of value and impact.

 

Conclusion

In conclusion, the transformation into a data-driven organization represents a journey that demands commitment, skill, and a strategic approach from every corner of an organization. Leadership’s support and vision set the foundational tone, empowering staff through enhanced data literacy, and establishing a robust infrastructure are essential steps in harnessing the power of data. This journey is not without its challenges, including resource constraints and the need for a cultural shift towards valuing data. Yet, the rewards—increased efficiency, impactful decision-making, and amplified mission effectiveness—far outweigh these hurdles.

A data-driven nonprofit is more than charts and graphs, it’s an entity where every number tells a story, every insight prompts action, and every decision is informed by data. This is not a destination but an ongoing process of learning, adapting, and innovating.

 

Julia Khon
President and Principal Consultant,
Una Buro

Julia Khon

Julia Khon

President and Principal Consultant, Una Buro